Foreign authorities seeking properties/bank accounts info: FBR won’t intimate concerned taxpayer about request

ISLAMABAD: The Federal Board of Revenue (FBR) will not intimate the concerned taxpayer about the request received from foreign tax jurisdiction seeking information on properties/bank accounts and beneficial owners of accounts, etc, under the exchange of information laws.

The FBR has issued Income Tax Circular Number 19 of 2023 on Saturday.

According to the FBR, the Board has prepared the manual for the Exchange of Information on Request (EOIR) as a guide to the internal processes and procedures to be followed by offices of Inland Revenue in respect of the Exchange of Information on Request and Spontaneous Exchange of Information of Pakistan.

The FBR has rolled out Manual for Exchange of Information for guidance of officers of Inland Revenue. The exchange of information is a key element in international cooperation and is important in ensuring the correct allocation of taxing rights between States and ensuring that States can enforce their own tax laws.

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The FBR has also clarified the roles and responsibilities and to provide guidance on carrying out the tasks related to Exchange of Information on Request (EOIR) and Spontaneous Exchange of Information (SEOI) so that exchanges of information are carried out efficiently and in accordance with internationally agreed standards including the standards on foreseeable relevance and confidentiality of the information exchanged.

Under the procedure, the taxpayer in respect of whom request is received from foreign jurisdiction shall not be notified that Directorate General of International Taxes, FBR has received a request to exchange information, except in certain cases where FBR is required by the domestic law of Pakistan or they are required by judicial authorities. In such cases, the competent authority of supplying state is informed of such obligations required by domestic law. Even where an exception may apply, the taxpayer shall not be notified when the requesting competent authority has specified that they should not be informed. Where the information required is held by a taxpayer, they shall be asked to provide the information and the letter shall provide only the minimum amount of information needed to enable the taxpayer to respond to the request.

The EOIR from the foreign competent authority shall not be shared with the taxpayer in any circumstance, FBR said.

In certain narrow circumstances, confidential information received from a treaty partner may be disclosed to persons outside the tax administration, for example, to the taxpayer concerned, to the Directorate General of Intelligence & Investigation-Inland Revenue for invoking provisions of the Anti-Money Laundering Act, 2010, and in public court proceedings. In case the information is to be shared with the Directorate General of Intelligence & Investigation-Inland Revenue permission to do so shall be sought from the competent authority of the information-supplying state as using the information for anti-money laundering purposes is considered for the non-tax purpose.

Any disclosure outside the tax administration should be authorized by the competent authorities of the Directorate General of International Taxes, FBR. The disclosure and use of information shall be governed by the relevant provisions of the legal instrument on the basis of which the information is shared and the relevant provisions of domestic law, the FBR added.

Copyright Business Recorder, 2023